2016 has been a rollercoaster and there doesn’t appear to be great cause for cheer in 2017 either, but can we find reasons to be cheerful?
- With Trump and Brexit, 2016 has been a tough year in markets
- However, it has immunised us, to some extent, from future turmoil
- The advice industry is in robust shape and is more important than ever
Advisers would be forgiven for looking out to 2017 with some trepidation. In fact, it could be argued that now is the time to drown your 2016 sorrows in some warming egg-nog and forget 2017 is ever likely to happen, what with the French and German elections and possible break-up of the Eurozone. However, this being the Festive Season, perhaps it is worth finding cause for cheer.
First and foremost, it’s difficult to see what would surprise us now. After Brexit, after Trump, if they elected Zinedine Zidane to President of France, or Heidi Klum to replace Chancellor Merkel, markets would be largely untroubled. Let’s face it, it’s not like they haven’t contemplated the break-up of the Eurozone before. The Italian referendum result appears to have left investors remarkably untroubled.
"After Brexit, after Trump, if they elected Zinedine Zidane to President of France, or Heidi Klum to replace Chancellor Merkel, markets would be largely untroubled."
There will be turmoil in the bond market, but there is a chance that investors will once again be able to use governments bonds for income in 2017. Annuity rates could rise and in one swoop, solve some of the most painful dilemmas facing retirees at the moment.
Markets aside, there has never been greater need for financial advice as the pensions crisis deepens. The needs of the next generation will be far more complex than, say, baby boomers with their final salary pensions and housing wealth, which in turn will see many turning to advisers.
For advisers, any volatility from political turmoil will give them a chance to reconnect with clients, reassuring them that things may not be as bad as they seem. They can point to tangible examples of why they should stay invested. It should also provide a gentle reminder to clients of the importance of hand-holding, rather than the cheap but impersonal option of a robo-adviser.
The elite is in trouble. Not that much trouble (they are the elite, after all), but a little bit of trouble. Advisers might do well to embrace the spirit of the age and look beyond them.